On Friday, the Federal Trade Commission voted to defer the compliance deadline for the amended Negative Option Rule by 60 days. The Commission issued a statement on the new deadline.
The delay reflects the FTC’s response to various commenters who expressed concern that, “given the complexities” of these provisions, it would take a substantial
In one of the first settlements since the new administration took office, the Federal Trade Commission (FTC) announced a $17 million monetary judgment with Cleo AI to resolve allegations that Cleo violated Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). Cleo operated a personal finance mobile app that purportedly allowed consumers to take out “instant” or same-day cash advances. The vote to authorize the settlement was 2-0.
According to the complaint, Cleo advertised that consumers could access same-day or instant cash advances in the hundreds of dollars. The FTC alleged that when consumers attempted to use Cleo’s services, they were required to enroll in an automatically renewing subscription service where they were charged a subscription cost of $5.99 or $14.99 monthly. Only after the consumers entered in their payment information and enrolled in the subscription service did Cleo disclose to consumers the cash advance they were eligible for.Continue Reading Cleo AI Settles with FTC for $17 Million for Alleged Misleading Practices and Autorenewal Violations
This week, California amended its automatic renewal and continuous service offer law (ARL). Key provisions include the addition of “free-to-pay conversions,” consent obligations, misrepresentation prohibitions, request for cancellation procedures, price change notifications, and reminder and recordkeeping requirements. The new law takes effect July 1, 2025.
The law will require “express affirmative consent” for all automatic renewal and continuous service offers. While the ARL provides no definition, class action plaintiffs’ attorneys, the California attorney general (AG), and California’s Automatic Renewal Taskforce (CART) are likely to interpret it similarly to the Federal Trade Commission’s (FTC) definition of “affirmative express consent,” i.e., “freely given, specific, informed, and unambiguous indication of an individual consumer’s wishes demonstrating agreement by the individual, such as by an affirmative action, following a clear and conspicuous disclosure to the individual.”Continue Reading California Amends Autorenewal Law, with Stricter Consent Requirements and a “One Save” Rule: Fast VAST Update
Consider these six options for challenging your competitors’ advertising and marketing claims—each with its own advantages and disadvantages.
Continue Reading Event in Review: Why Can They Say That, but I Can’t? How to Challenge Your Competitors’ Advertising While Avoiding Being Targeted
Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear an author of this chapter dive deeper into telemarketing and texting in this week’s episode.
Telephone and text message marketing poses private litigation risks and regulatory hurdles that should be considered before any campaign. The Federal Trade Commission (FTC), the Federal Communications Commission (FCC), and states enforce do-not-call (DNC) laws and impose multiple other requirements regarding calling manner, disclosures, consent, opt-out, calling hour limits, caller identification, and telemarketer registration. Calls and texts made to cell phones, using certain types of dialing technology (including autodialers) and prerecorded messages (so-called robocalls), require particular attention, as much of the enforcement and litigation in this area involve texting and robocalling.Continue Reading Telemarketing and Texting: An Excerpt from the Advertising Law Tool Kit
Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the authors of this chapter dive deeper into the issue of lead generation in this week’s episode.
In the evolving world of lead generation and performance-based customer acquisition, the quest for profits can lead to big legal risks, some of them too large for advertisers that buy leads through third parties. Advertisers that harness the power of lead generation should consider the best practices listed below to mitigate legal risk.
Lead generation best practices:
Understand basic advertising law. Advertising must be truthful and not misleading. Marketers and lead generators should understand what can make an advertising claim “deceptive,” as well as the appropriate use of disclaimers.Continue Reading Lead Generation: An Excerpt from the Advertising Law Tool Kit
Last week, the Federal Communications Commission (FCC) issued a Notice of Proposed Rulemaking proposing to “ban the practice of obtaining a single consumer consent as grounds for delivering calls and text messages from multiple marketers on subjects beyond the scope of the original consent.”
According to the FCC, the proposed rule’s intent is to prevent lead generators from obtaining consent to receive calls and texts from multiple “partner companies” identified through a hyperlink rather than on the same page where consent is obtained. Implementing this rule could drastically change the way lead generators obtain consent for marketing calls and texts under the Telephone Consumer Protection Act (TCPA).Continue Reading FCC Proposes Rule to “Close the Lead Generator Loophole,” with Business-Changing Ramifications
When it comes to negative options, the CFPB has strong opinions. As demonstrated in its new circular, these opinions generally align with those of the Federal Trade Commission (FTC), which has repeatedly targeted trial offers, subscription sales, and other programs involving recurring charges for enforcement. The circular reaffirms the CFPB’s focus—shared with the FTC—on combating digital dark patterns used to engage in unfair, deceptive, or abusive acts or practices, especially when those techniques are combined with negative option marketing.
In an upcoming webinar on March 1, 2023 (RSVP here), Venable will be presenting an in-depth analysis of the CFPB’s circular, as well as CFPB and FTC enforcement actions and private litigation based on purportedly unlawful negative option marketing. For those who can’t wait, we’ve summarized the highlights of the circular below.Continue Reading The CFPB Joins the FTC on Negative Option Marketing and Dark Patterns in New Circular
Courts continue to grapple with issues surrounding Florida’s Telephone Solicitation Act, including what types of claims are sufficient to allege a concrete injury in fact to establish standing under Article III.
In December, the saga continued, with a federal court in Florida finding that the plaintiff did not adequately allege injury despite receiving five unsolicited text messages from the defendant between November 2020 and July 2021. In Muccio v. Global Motivation, Inc., the plaintiff filed a five-count class action complaint alleging violations of the Florida Telephone Solicitation Act (FTSA) and the Telephone Consumer Protection Act (TCPA). The defendant filed a motion to dismiss, arguing that the plaintiff failed to allege that she suffered an “injury in fact” sufficient to give rise to Article III standing.
The court agreed with the defendant, citing the framework set forth by the Eleventh Circuit in Salcedo v. Hanna, which found that the receipt of a single unsolicited text message does not give rise to Article III standing in a TCPA class action. Applying Salcedo, the court found that there were no allegations of “financial loss or other pecuniary harm,” nor did plaintiff allege he was unable to use his phone for other functions because of the unwanted messages, or that his cell phone was searched, disposed of, or seized for any length of time.Continue Reading Florida Court Dismisses Telemarketing Claims for Failure to Plead Injury; Plaintiff Appeals to Eleventh Circuit
Although the concept is not new, challenges to “dark patterns” are rising all over the country. The Federal Trade Commission, Consumer Financial Protection Bureau, state attorneys general, and class action plaintiffs increasingly cite this phrase in such complaints as deceptively enrolling consumers